Electric vehicles (EV) Pilot partners pose in front of the Nissan LEAF EV while it's plugged into the V2G charger.

EV Pilot partners pose in front of the Nissan LEAF EV while it's plugged into the V2G charger. Left to Right: John Wheeler of Fermata Energy, Gail Lattimore of Codman Square Neighborhood Development Corporation, Dick Jones of BlueHub, Melissa Chan of Fermata Energy, Matt Cloud of Enterprise Mobility, Thomas Walling of Enterprise Mobility. Credit: Marilyn Humphries Photography

Climate Lending Is Embedded in CDFI’s Mission: Q&A with BlueHub Capital 

Dick Jones and Karen Kelleher of BlueHub Capital share how their organization has transitioned to climate lending — it’s more organic than you think — and the CDFI’s path ahead.   

Read time: 8 minutes

OFN and our membership are celebrating the historic Greenhouse Gas Reduction Fund awards and the catalytic capital they will bring to CDFIs to invest in rural, urban, and Native communities. As we look ahead to the impact this program will have nationwide — jobs, energy savings, disaster preparedness, and more — OFN is periodically spotlighting our members at different stages of climate lending.   

CDFIs have always been guided by the needs of the communities they serve. As climate change intensifies, these needs will evolve. BlueHub Capital, a national CDFI based in Boston and an OFN member, is an industry leader in climate lending, but they might not call it that. 

It all starts with the communities they serve. 

BlueHub gave us an inside look at their Electric Vehicle (EV) Pilot program. The first-in-the-nation program partners with a local utility company and community-based organizations to bring low-income communities into the EV transition. BlueHub is piloting the program in partnership with Girls Latin Apartments, an affordable housing complex in Dorchester, Massachusetts. An EV charging infrastructure powers the vehicle, and the battery storage is used as a clean energy source for the apartments and utilities when it isn’t needed to drive the car. 

We sat down with Dick Jones, President of BlueHub Energy, and Karen Kelleher, President of BlueHub Loan Fund, to learn more about the program and BlueHub’s mission and strategy to create a more sustainable community.   

How does climate lending fit into BlueHub’s mission and strategy?

Jones: We’ve never really distinguished green or climate lending from our other lending. We started as an affordable housing lender, and we focused on ensuring the properties we financed were safe, easy to manage, durable, and resilient so they were healthy and enjoyable to live in. Those measures had the added benefit of lowering utility costs and exposure to utility spikes. We approached this through the lens of what was best for our borrowers and have approached “climate” lending similarly — it’s rooted in our mission to support our communities.  

How are CDFIs uniquely positioned to address the climate needs of low-and medium-income households?

Jones: CDFIs are nimble; we can innovate. We’ve been around for a long time. We’re also close to our borrowers and understand their needs. Take, for example, an affordable housing group. Their problem isn’t that they don’t have solar power or electric vehicles. It’s that their utility costs are too high or too volatile, or their neighborhood is polluted. Clean energy technology offers solutions to these problems.  

Tell us more about the path that led to BlueHub’s climate portfolio.

Jones: I’ll step back and look at our solar work first. A few decades ago, we started seeing solar energy as a more cost-effective energy source, but installing it was expensive and only accessible to wealthier communities. We could see a mismatch between who could benefit most from clean energy, who was accessing it, and who was shaping policy around it, leaving the communities we serve further behind.  

There was a tangible tension between community development and environmental justice. Affordable housing communities said, “We can’t afford the luxury of environmental technologies,” but climate activists responded, “No, we must do this.” Leaning into this tension led to our solar work.  

We looked at the challenges tenants in our communities faced. At the time, energy prices had spiked, people struggled to pay their bills, and cash flows were shrinking. We saw that properties needed to lower their energy costs — and solar was a good answer. We also launched a utility benchmarking company, Wegowise, now an industry-leading web-based tool that distills energy and water data, enabling building owners to track, understand, and benchmark building performance and make better efficiency investment decisions. 

Electric vehicles are similar to solar in how they solve problems for the community. The technologies lead to cleaner cars that are more affordable to maintain and less expensive in the long run but difficult for low-income drivers to access. Knowing these benefits, we realized we must act before it’s too late, before we have a two-class transportation system, which we’re already seeing unfold.

How did you approach barriers to introducing EVs into low and medium-income communities, and how did that influence the program design?

Jones: The primary barriers in these communities are the initial expense of the car, the cost of electricity, and installing the charging infrastructure. The first barrier somewhat addresses itself: car prices are decreasing, and federal and state tax credits have been expanded and reformed to include used cars and make the credit immediately available. To address the other barriers, we considered the technology’s co-benefits.  

Core to our approach was thinking through how we look at these cars and their batteries as something more than what you drive around. EV batteries are very large and not always in use. Utility companies are looking for cheaper ways to meet peak power demands that don’t require cranking up an expensive power plant. They are willing to pay to tap those batteries during peak times, making the energy more affordable and cleaner for everyone.  

We recognized that now you have the benefit of a new car and an energy grid that you can monetize, which helps address the affordability problem. There’s even a resiliency benefit: if power goes out, people can tap the car battery to help power their homes.  

Click to expand the infographic and learn more about the broad benefits of electric vehicles

Now that we’ve identified the barriers, tell us about your community engagement strategy around climate lending. And where, specifically, smaller CDFIs can play a more significant role.

Kelleher: We identify the players who are innovating and aligning their tools with community needs, creating resiliency, and driving public policy to make investments happen. But it takes deep investment in understanding the problems that the community wants to solve. In this situation, we were able to marry the very complex technical expertise of vehicle-to-grid technology with knowledge of the community. 

It’s a three-way engagement model involving public officials or resource providers, community members, often engaged by and through community organizations or borrowers, and technical experts who are critical to making these investments effective. Navigating between these stakeholders is vital but challenging.  

Smaller CDFIs have an advantage when it comes to engaging communities. They are well positioned to deeply and consistently engage with their communities and understand their challenges, which allows them to take a more systematic and personal approach to solving the problems. These CDFIs will be able to bring that community voice and perspective to the table. That’s powerful.  

What internal change management or capacity building did you need to build to launch this product?

Jones: Partnership has always been key to having the right capacities in place. I talked to a few nonprofits and environmental justice groups. They saw EVs as too expensive for their communities and a potential tool for gentrification. So, it was important for us to keep talking until we found a partner who shared this concern but was still willing to find a solution.  

We found a great partner in a local development corporation that helped prove our model could work. Finding the right partner would have been much more challenging without our deep community relationships.  

Partners also bring expertise. BlueHub doesn’t have to be an expert in EVs, and neither do tenant managers or residents. So, we use our knowledge of communities first and lean on our partners to bring expertise where needed. 

The other thing we’re doing for capacity building is investing in our own learning. We are training our team and engaging with various thought leaders across the industry because we know there’s so much knowledge to gain from these individuals. We’re also adding a Vice President of Climate Lending to support our development of climate lending strategies and build industry capacity. 

What’s next for BlueHub in climate lending?

Kelleher: BlueHub continues to make economic development, community facility, and housing loans that include elements of climate resiliency.  

For affordable housing, the work has been expanding. I think there’s an opportunity to create more consistent strategies for approaching economic development and ensuring that we’re learning from one asset class and applying knowledge gained to other asset classes. Right now, we’re really lending to learn.  

We also try to ensure that our strategy is driven by mission and not by the availability of capital or programs. We see tremendous opportunities ahead for CDFIs and the communities we serve, and we’re thrilled to have partners like OFN convening and catalyzing the industry. BlueHub’s national reach positions us to put what we learn in one community to work in other communities, serving as a force multiplier and capacity builder across the industry.  

Keep the Conversation Going

Join the Climate Mitigation & Adaptation group on CDFI Connect, an online community for discussion, idea sharing, and organizing around climate issues as they relate to the work of CDFIs.

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